In the Turkish wire rod market, after the price increases observed in the week before, wire rod prices have this week maintained their strong trend. In the last days of August, wire rod sales picked up as buyers decided to purchase some quantities of wire rod for their inventories; however, in the first days of September the transaction situation has been on the quiet side.
With a producer in the Iskenderun region of Turkey returning to the market having reactivated its wire rod production line on Friday last week, it is expected that all the pieces of the puzzle will fall into place in the Turkish wire rod market. Yet, some buyers in the Iskenderun region have continued to supply their wire rod needs from other regions of the country.
Looking at the export side, there is an expectation that market activity will gain further momentum when buyers in the Middle East return to the market for new purchases after the end-of-Ramadan holiday. With the continuation of public and private sector projects in Saudi Arabia, it is thought that buyers may increase their bookings in the post-holiday period. However, some traders in Saudi Arabia hold high levels of wire rod inventories. Besides, it is reported that some Saudi buyers prefer to supply their needs from local mills, given the transport costs and arival times involved. In the current period, the higher-than-expected levels of ex-China boron-added wire rod export offers are also causing Saudi buyers to hesitate as regards these export offers.
As of this week, mesh quality wire rod prices in the Eastern European markets stand at €510-520/mt delivered to customer. In this region, for the moment it is too early to be able to describe demand as being strong.
Likewise, buyers in the Far East and the US are also heard to be hesitating as regards imports. Also, considering that ex-Turkey wire rod offers are at high levels, some buyers in Sri Lanka prefer to evaluate Indian origin wire rod export offers, which are more competitive as compared to Turkish offers.
This week the most important news about the African market is that a free trade zone for China is being created in Lagos, the largest city in Nigeria. This development is expected to strengthen business connections between China and West Africa, and may have a negative impact for possible transactions to West Africa from other countries.